Defence Housing Australia (DHA) privatisation mooted, but not signed off, in 2014 federal budget

Defence Housing Australia (DHA) privatisation mooted, but not signed off, in 2014 federal budget
Defence Housing Australia (DHA) privatisation mooted, but not signed off, in 2014 federal budget

Defence Housing Australia could yet be privatised after the 2014 federal budget.

The budget provides $11.7 million for “scoping studies into future ownership option” for Defence Housing Australia, the Royal Australian Mint, Australian Hearing and the corporate registry function of the Australian Securities and Investments Commission.

Overall the government will axe 16,500 jobs over three years, by cutting 230 bureaucratic programs and 70 government agencies.

The DHA remains a likely target, although the influential head of the Australia Defence Association, Neil James described the pre-budget reported plans to sell off Defence Housing Australia as set to be a "broken promise" and a "betrayal."

It was The National Commission of Audit that recently recommended privatising Defence Housing Australia, which manages a portfolio of 18,300 properties valued at around $10 billion.

The DHA delivers annual profits to the Commonwealth of $100 million-plus.

The audit report suggested it be done in the first phase of any privatisations by the Abbott government. 

DHA currently provides housing and related services to Defence members and families in order to support the operational, recruitment and retention goals of the Department of Defence.

DHA constructs, purchases and leases houses for Defence personnel, manages dwelling allocation and tenancies and acquires and develops land to build mixed military and private communities.

Most of its funding comes from Defence, or Defence employees.

It finances additional capital investment by selling and leasing back dwellings, the sale of land and dwellings from developments and the disposal of surplus properties.

As at 30 June 2013, DHA had 18,300 houses under management, including over 3,800 it directly owned and around 12,500 leased from investors.

In 2012-13, DHA spent $305 million on a capital programme to acquire 590 new houses by construction or purchase, and $14.4 million on the acquisition of 38 apartments.

It also has a $360 million programme to upgrade and replace defence owned houses.

DHA currently has 12 major developments in progress, including in Sydney, Darwin, Townsville, Canberra and Brisbane. 

DHA was established to commercially manage and improve the defence housing stock as a result of criticism in 1986 of the poor standard of accommodation then available.

Since its creation, DHA has undertaken a major program to bring defence housing up to community standards.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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